Banking chatbots help customers complete banking transactions with ease using voice or text. Banking chatbots can reduce operational costs for banks while improving customer satisfaction. However, this is an emerging technology and banks are advised to deploy well tested solutions to ensure that their reputation is not harmed by chatbot glitches.
What is a banking chatbot?
Thanks to the developments in artificial intelligence and increased mobile use, banking chatbots are becoming more popular.
Banking chatbot is an AI application that perceives and executes the banking transactions of customers. In banking, chatbots provide opportunities to automate the relationship between the consumer and the bank. Banking has been entering a new, conversational banking era after ATMs and then telephone banking, online banking and mobile banking since the past years. Conversational banking includes both Interactive Voice Response (IVR) systems and chatbots.
Banking chatbots are also called conversational banking, virtual financial assistants or virtual banking assistants. For more on chatbots, feel free to read our research on the topic.
Why are banking chatbots important now?
Automation provided by chatbots will be beneficial for banks:
- A Juniper research predicts that 90% of interactions in banks will be automated by 2022 using chatbots. The research also suggests that “dramatic cost savings” can be made in banking sector.
- Chatbots are cost-efficient. Accenture research shows that 57% of companies agree that chatbots can result in large returns on investment with minimal effort.
Customers are already familiar with messaging which consists of a large share of their mobile usage:
- Demand for mobile banking is increasing. Citi points out that 91% of users have positive outcomes with mobile banking. 24/7 available chatbots integrated to mobile applications can offer users immediate solutions to their urgent problems that they can not resolve via the app.
- Customers prefer messaging. Almost all mobile users are familiar with messaging apps such as Whatsapp, Telegram, Slack. Written and conversational communication over those applications is preferred especially by millennials. Banks are also testing using these popular messaging platforms for customer service.
What are the benefits of banking chatbots?
- Ease of use: Chatbots can easily be integrated into many platforms such as conversational platforms, mobile applications or websites. Thus, the banking actions can be executed by communicating with chatbots on any platform and these bots are getting easier to access and smarter.
- Faster customer support: Connecting to customer representatives of banks can sometimes be a process that requires a lot of waiting. Chatbots can help users without waiting for the available customer representative.
- Increase in user engagement: Banks constantly create new campaigns and personalized financial plans. Chatbots can make it easier for a user to choose the appropriate products for them and obtain information.
- Reduced costs: Deployment of a chatbot is cheaper and faster than the development of customer service and hiring employees. Chatbots serve 24/7 and a chatbot platform can serve numerous customers.
- Fraud reduction: One of the problems frequently encountered by credit card users is online theft and fraud. Banks are developing systems that inform the user to prevent this. If chatbots can keep users aware of suspicious transactions, frauds can be minimized.
What are the use cases of banking chatbot?
- Lead generation and qualification: Chatbots can engage with the visitors on the bank’s digital properties to generate leads and qualify those leads with relevant questions.
- Customer Service: 24/7 availability, tireless and consistent nature of chatbots for customer support is an important and obvious advantage for chatbots in banking. Chatbots can provide consistent and precise knowledge and precise every time customers interact with it.
- Feedback Collection: Long feedback forms and surveys can be boring to complete. A chatbot can engage customers with its natural language understanding and generation.
Personalized marketing strategies: Customers’ conversations with chatbots can be analyzed to personalize bank’s messages for the customer.
How to build your bank’s chatbot?
- Understand the limitations and challenges of chatbot technology: A good analysis of the capabilities and limitations of existing AI-powered chatbot technology can set the right expectations and goals.
- Review how to protect user data: Banking companies are responsible for protecting the information gathered by chatbots. The chatbot needs to be reliable in terms of data security.
- Review how to secure transactions: Chatbots, especially those that focus on customer service, increase attack surface. The transactions that they can complete, authentication procedures etc. need to be reviewed to ensure secure service
- Build specialized chatbots: There are many use cases of banking chatbots from lead generation to customer service. Startitig with a domain specific chatbot can simplify requirements which is critical in any technology project.
- Test extensively: There are numerous cases of chatbot failure. Don’t let your financial institutions’ conversational agent be a failure. Testing for edge cases can help minimize or prevent screenworthy failures of your company’s chatbot.
- Be consistent across channels: Although the integration of a chatbot system over messaging platforms is relatively easy, it can be challenging to run the same chatbot system on these different platforms consistently. Banks need to pay attention to the consistency of their service and messaging.
What are the top vendors?
We only included chatbot tech providers that relied on their in-house technology to deliver conversational solutions only to financial institutions. There are many other conversational AI developers providing solutions to banks but this is the list of vendors focused only on the financial services industry:
- Finn AI
For more on chatbots and AI in financial services, feel free to read these articles:
- Digital transformation for banking in 2020: In-depth guide
- Chatbots: In-depth Conversational Bots Guide
- Top 25 successful chatbots of 2020 & Reasons for their success
- 30+ Chatbot Usecases / Applications in Business in 2020
If you have questions about how banking chatbots can help your business, feel free to ask us:
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